The Stratford model at Dorset Park in Weymouth, Mass., garnered Gold honors in the NAHB Best in American Living production home category. Photo by Shelly Harrison Photography.

A surge in multifamily production pushed overall housing starts up 9.7% in January to a seasonally adjusted annual rate of 1.33 million units after an upwardly revised December reading, according to newly released data from HUD and the Commerce Department.

“The growth in production is in line with our reports of solid builder confidence in the housing market,” said NAHB Chairman Randy Noel. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”

“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a downpayment on a home,” said NAHB Chief Economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”

Regionally in January, combined single- and multifamily housing production increased 45.5% in the Northeast, 10.7% in the West, and 9.3% in the South. Starts fell 10.2% in the Midwest.

Overall permit issuance rose 7.4% to a seasonally adjusted annual rate of 1.4 million units, which is a post-recession high. Multifamily permits registered a 26.5% gain to 530,000 while single-family permits edged down 1.7% to 866,000.

Permit issuance rose 92.5% in the South and 17.1% in the West. Permits declined 2.6% in the Midwest and 21.7% in the Northeast.